Mass and Qaiwan Cut 500 Megawatts From Kurdistan Region While Sending 1,000 Megawatts to Federal Iraq

ERBIL (Kurdistan24) - The two private electricity companies supplying the Kurdistan Region, Mass and Qaiwan, have reduced their power delivery to the Region by 500 megawatts while simultaneously continuing to send 1,000 megawatts to federal Iraq, a source familiar with the matter at the Kurdistan Region's Ministry of Electricity told Kurdistan24, in a disclosure that has directly caused a reduction in electricity hours across the Kurdistan Region.

The value of the 1,000 megawatts being sent to federal Iraq amounts to approximately $70 million per month, which is equivalent to more than 100 percent of Mass and Qaiwan's monthly financial entitlements, the source confirmed. That payment is made directly from Baghdad to both companies, bypassing the Kurdistan Regional Government entirely. Despite receiving this payment in full from the federal government, Mass and Qaiwan continue to demand additional payments from the Kurdistan Regional Government, a position the Ministry of Electricity source described as financially unjustifiable.

The Electricity Being Sent South

The 1,000 megawatts currently being dispatched to federal Iraq from the Kurdistan Region primarily flows to Kirkuk, Ninewa, and Diyala provinces, areas that depend heavily on Kurdistan Region electricity supply to supplement the chronically insufficient federal grid. Federal Iraq continues to suffer from chronic power shortages across most of its provinces, with the Kurdistan Region's private power sector providing a critical buffer that gives Baghdad a political interest in maintaining the supply agreements even as disputes over payment and allocation continue.

The monthly payment of approximately $70 million from Baghdad directly to Mass and Qaiwan for this 1,000 megawatt supply represents a revenue stream that is being fully honored by the federal government, making the companies' simultaneous reduction of supply to the Kurdistan Region and their additional financial demands on the KRG a position that the Ministry of Electricity source told Kurdistan24 lacks any financial justification.

Who Mass and Qaiwan Are

The two companies at the center of the dispute are among the largest private energy operators in Iraq. Mass Group Holding is an Amman-based company owned by prominent Iraqi-Kurdish businessman Ahmad Ismail Saleh, which runs three power plants in Kurdistan's Duhok, Erbil, and Sulaimani provinces as well as the Bismaya plant in Baghdad, as Iraq Oil Report confirmed. The KRG had accumulated more than $4 billion in outstanding debt to Mass Group alone as of December 2021, a figure that has shaped the terms of every negotiation between the company and the Kurdish government since.

Qaiwan Group is one of the largest Iraqi conglomerates based in the Kurdistan Region, chaired by Saad T. Hasan, with operations spanning power generation, oil refining, real estate, education, and healthcare, as Foreign Policy confirmed. Qaiwan's power plant contract with the General Company for the Transmission of Electricity for the Northern Region covering 400 to 800 megawatts was renewed by Iraq's Council of Ministers in June 2022, as Iraq Business News confirmed, giving the company direct contractual relationships with both the KRG and the federal government simultaneously.

Together, Mass Holding Limited and Qaiwan Group, alongside Kar Group, supply the KRG power to Kirkuk, Ninewa, and Diyala provinces under annual power purchase agreements that have generated nearly $10 billion in revenues for the Kurdistan Region's energy sector, as the New Lines Institute and American University confirmed in analysis of the KRG's electricity export model. The electricity exports from Kurdistan to federal Iraq have served a dual strategic purpose, relieving significant social and political pressure on the federal government while generating substantial revenues for the Kurdistan Region's private energy companies.